A few days separate Sri Lanka’s economy from “total collapse”

Sri Lanka’s central bank chief said on Wednesday the country’s economy will “irreparably collapse” unless a new government is appointed within two days to restore political stability.
Nandal Wierasinghe added that the recent wave of “mob violence” had derailed the bank’s recovery plans, and that the prime minister’s resignation on Monday and the lack of an alternative were complicating matters, AFP reported.
He considered that political stability is vital to the implementation of economic reforms aimed at addressing the country’s debt crisis and the severe shortage of foreign exchange to import necessities.
“If there is no government in the next two days, the economy will collapse completely and no one will be able to save it,” the governor of the Central Bank of Sri Lanka added.
And he added: “The country was going downhill fast when I took over a little over a month ago, and I thought we could put the brakes on, but with Monday’s events, the brakes no longer worked.”
He added, “In a week or two the economy will collapse completely, no one will be able to save Sri Lanka at that point, and my presence here as governor will not help; I will resign if there is no immediate action to form a government.”
Shortly after taking over as head of the bank last month, Weerasinghe announced the default of Sri Lanka’s $51 billion foreign debt, saying the country had no money to repay its creditors.
He nearly doubled interest rates and allowed the rupee to depreciate rapidly to ensure better foreign exchange liquidity at the commercial banks.
Sri Lanka is facing its worst economic crisis since its independence from Britain in 1948, after running out of dollars to import even the most basic necessities.
There were long queues for fuel and food causing severe hardship for the country’s 22 million people, prompting them to protest against the government.
“If we don’t have political stability, we will soon run out of gasoline and diesel left, at which point people will take to the streets to protest peacefully or violently,” Weerasinghe said.